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🏦 Insurance vs innovation
A crisis in a mid-sized bank is prompting calls for changes to Brazil's deposit insurance system, pitting large financial corporations against fintech upstarts
The crisis of a private bank could cause setbacks in Brazil's fintech market

Many see BRB’s Master deal as a state-led intervention, albeit a quiet one. Photo: Master
The financial troubles of a mid-sized bank have prompted Brazil’s largest financial institutions to call for changes to the country’s deposit insurance system, exposing long-simmering tensions between traditional banks and fintech upstarts.
Early in April, Banco de Brasília (BRB), a state-owned lender tied to the local government in the capital, announced plans to acquire a stake in Banco Master, a private institution teetering on the edge of a funding crisis. The proposed rescue (a 10-figure deal) surprised markets and drew close scrutiny from the Central Bank, which has up to a year to analyze the operation.
Many in the market see the deal as a de facto bailout, intended to prevent broader financial contagion. Both institutions deny this — but the deal is facing legal challenges.
The case has reignited debates over the role of Brazil’s deposit insurance fund (known as Credit Guarantee Fund, or FGC), a privately managed deposit insurance scheme that has become central to the business models of many smaller banks and fintechs.
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